Many people in or near their silver years know they should own long-term care insurance, but there are several hurdles the policies haven’t cleared with them. Fortunately, there is a short cut solution to clearing most of these hurdles.
There are several common reasons people don’t buy LTCI:
There’s no doubt a number of LTC insurers have had financial problems in recent years. They’ve been buffeted by low interest rates and investment losses. Some did a poor job of reviewing applicants and setting premiums to match the health of their policyholders. Others didn’t do good jobs of estimating life expectancy, medical cost increases, and the percentage of people who would let their policies lapse before filing claims. Companies that made these mistakes have to boost their reserves and often do so by increasing or challenging claims.
Most of these problems can be avoided by limiting your comparison shopping to the largest and top-rated LTC insurers. These companies tend to be diversified, so they can use their strength in other insurance businesses to shore up any mistakes or adverse changes in LTC. Also, they’ve been writing LTC policies longer and so make fewer mistakes than smaller and newer LTC carriers.
The top five LTC insurers are Genworth, Bankers Life & Casualty, John Hancock, MetLife, and Transamerica. Don’t shop for the lowest premiums and loudest policy bells and whistles. You want a solid company with superior financial safety ratings that has been in the LTC business for a while. (The industry is only about 30 years old.) I think you also should prefer a diversified company that can tap resources other than its LTC premiums. (The risk of a diversified company is that hardships in one or more of its other businesses could hurt the LTC business.) Read closely the reports about problems with LTC policies, and most of the time you’ll see the problems are concentrated among companies new to the business, small insurers, and non-diversified insurers.
Log In
Forgot Password
Search